About Mortgages
Mortgages are the tool by which homeowners finance new homes. A mortgage is a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt. Mortgages are normally issues by either banks or mortgage lenders as a debt instrument, secured by the collateral of specified real estate property. The borrower is obliged to pay back the mortgage amount plus interest with a predetermined set of payments. Mortgages are used by individuals and businesses wishing to make large value purchases of real estate without paying the entire value of the purchase up front. Mortgages are sometimes known as liens against property due tot the fact that the bank or mortgage broker holds the lien to the property until fuly paid by the lender. In a residential mortgage, a homebuyer pledges his or her house to the bank. The bank has a claim on the house should the homebuyer default on paying his or her mortgage. In the case of a foreclosure, the bank may evict the home's tenants and sell the house, using the income from the sale to clear the mortgage debt.
